EU to Suspend Financial Aid, Trade Perks for Israel

The European Commission has announced the suspension of financial support to Israel for the period 2025-2027, with the exception of aid provided to civil society and the Yad Vashem Holocaust memorial complex.

The decision is related to the "escalation of the Israeli-Palestinian conflict and human rights violations," which, in the EU's view, are demonstrated by the actions of the Israeli government.

"The horrific events taking place every day in the Gaza Strip must stop," said European Commission President Ursula von der Leyen. "An immediate truce must be established, unhindered access to humanitarian aid must be provided, and all hostages held by Hamas must be released. The European Union remains the largest donor of humanitarian aid and a staunch supporter of the two-state solution. Given these fundamental commitments and the latest serious developments on the West Bank, we propose to suspend trade preferences with Israel."

The suspension applies to the main trade-related provisions of the Agreement and in practice means that goods imported from Israel will lose their preferential access to the EU market. Customs duties will be levied on these goods at the level applied to third countries with which the EU does not have a free trade agreement.

The European Commission's statement clarifies that the suspension applies to future allocations, as well as current institutional cooperation programs and programs under the EU-Israel regional cooperation mechanism, the total amount of which is about 20 million euros.

It should be emphasized that the EU is Israel's largest trading partner; in 2024, it accounted for 32% of Israel's total trade in goods with the world. Israel is the EU's 31st largest trading partner. The total volume of EU-Israel trade in goods in 2024 was 42.6 billion euros.